The folder /var/www/html is not configured and not supported by ISPCOnfig. You wull have to create a website in ISPCOnfig and put your files in the website folder that ISPCOnfig creates for the website.

1) Point both nameserver entries to your server IP. But if your server fails, the domain will not be reachable anymore in DNS. On the other hand, if Mail and Webserver are on the same server anyway, it does not make a big difference if DNS fails too

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i have registered a new domain example2.com with godaddy.com

i want to host this new domain on my ispconfig server (example.com)
however, when i try to point the DNS of example2.com to example.com, godaddy gives an error, "Unavailable error in field Host name1"